The controversy surrounding a plan to put nutrition rating labels on processed foods has already claimed the job of the Assistant Minister for Health's chief of staff. The stoush has revealed the deep links between 'big food' and the government, writes Ann Arnold.

UPDATE

On 6 December 2014 the federal government finally reinstated the Health Star Rating website, ten months after it was pulled down by the Assistant Health Minister Fiona Nash.

The health star rating scheme remains voluntary for food companies. It’ll be reviewed after 2 years to see how many manufacturers agree to put the star rating on the front of their food packs.

It sounds innocuous enough—a plan to have clear labelling about the health qualities of processed foods, so that consumers have a better sense of what they’re buying.

But a system that would see star ratings on the front of most edible items on supermarket shelves hit a spectacular hurdle in Parliament House last month.

In what became one of the biggest parliamentary stoushes so far this year, Senator Fiona Nash was forced to defend her chief of staff, Alastair Furnival, after he rang the Department of Health and ordered it to take down a new website that was to be part of the health star ratings system.

We put in a huge amount of time and effort, and did it in good faith, and dealt with this particular section of industry in good faith. Now we see a turning away from that and the use of that standard political tactic when you don't want something to happen, of delay.

Michael Moore, Australian Public Health Association CEO

Alastair Furnival was quickly exposed as a lobbyist for the food industry who had not resigned as a director from his lobbying company, Australian Public Affairs, nor sold his half share in it, while he worked for the Assistant Minister for Health. He subsequently resigned from his job and Senator Nash was censured in the Senate by Labor and the Greens for misleading Parliament.

That whole episode, however, was just the tip of an iceberg. For two years there has been a battle fought out over front of pack labelling. It’s a tale of industry and political connections, expectations dashed and influence wielded.

In one camp are health and consumer advocates concerned about the fact that diet-related illness—or dietary risk—is now the leading cause of death in the world.

In the other camp are some sectors of the food industry: mainly the larger, multinational companies, or ‘big food’, who say the expense of changing their packaging is onerous and business should not have to bear the brunt of it.

The traditionally warring groups were brought together by the federal Labor government in 2012 to thrash out a new labelling system. It was a revolutionary move. Food enemies were sitting at the same table.

Michael Moore, chief executive officer of the Australian Public Health Association, recalls: ‘Actually at the start of the process I think there was quite a lot of trepidation. As the process went on through the first year, I think we all grew in confidence, a great deal of confidence, because we really were working hard to try and find a compromise that would work.

‘When we came up with the star labelling system, because it works on white goods, because it works on movies, because it works on hotels, it would be easy to understand. It would give an overview of the healthiness of the food. I think our optimism grew.’

Soon, his view would change. The Australian Food and Grocery Council, the powerful peak body for the manufactured food industry, had been involved in developing the scheme.

But around the middle of last year, the council started to publicly criticise it. Various anomalies were raised about how particular foods were rated—issues which Mr Moore said were being dealt with by the committees in which the council was represented.

The AFGC also wanted a cost benefit analysis, and ‘more work’ to be done.

Mr Moore told Background Briefing he felt betrayed. ‘We put in a huge amount of time and effort, and did it in good faith, and dealt with this particular section of industry in good faith. Now we see a turning away from that and the use of that standard political tactic when you don't want something to happen, of delay.’

How does he feel about that whole process now? ‘Oh well, shafted of course.’

This article represents part of a larger Background Briefing investigation. Listen to Ann Arnold's full report on Sunday at 8.05 am or use the podcast links above after broadcast

The apparent change of heart by the AFGC came after a meeting in June last year of the nation’s health ministers, which, by vote, approved the star rating system. Big business was spooked by the health ministers’ surprise decision to make the voluntary system mandatory within two years if not enough companies had taken it up.

In an interview recorded by ABC TV’s 7.30 in February, Gary Dawson, the AFGC’s CEO, said: ‘It’s a voluntary start up, but it’s a clear threat to force this on food companies from June next year. That’s written up in the decision and so the cost impact is real.’

Processed food is Australia’s largest manufacturing industry, and it’s growing. A Deloitte report released this week forecasts food processing as one of the future growth waves for Australia. Although hit at the moment by a strong Australian dollar, it is poised to make a big impact on the Asian market.

‘So it’s a significant cost, particularly on an industry that’s in a financial squeeze at the moment. Profits are declining. Companies like SPC or Simplot can hardly afford spending millions of dollars on a scheme where the benefits are far from well understood or proven.’

The managing director of Simplot Australia is Terry O’Brien, who became the chair of the AFGC in February last year. He is a veteran of the Australian food industry, and was previously employed by Cadbury-Schweppes.

Simplot is an American-owned private company whose Australian brands include Edgell, Leggo’s and Chiko (as in Chiko Roll). Background Briefing sought an interview with Mr O’Brien, but he declined.

He was quoted in The Australian in December citing the cost of the new labelling to his company at an estimated $2.5 million.

Simplot was at that stage faced with closing its factory at Bathurst, in NSW. The company has since announced nearly 300 jobs will be cut from Bathurst and another base at Devonport, Tasmania, over the next few years.

The Australian reported that late last year, the AFGC was actively lobbying National Party MPs about the star ratings system.

The former chief of staff to Senator Fiona Nash, Alastair Furnival, was well connected to the AFGC. He had previously worked with at least two companies—Cadbury and Mondelez—whose leaders are on the board of the council.

Gary Dawson, the council’s CEO, had been a senior member of John Howard’s staff.

‘So he would have dealt very regularly with many, many of the members of Parliament who were likely to be ministers, and who have become ministers,’ says Michael Moore.

Mr Dawson told the 7.30 program in February that he did phone Senator Nash’s office on the day the health star ratings website came down.

‘We’ve been in contact with them regularly over a considerable period ... so on the day, yes, we expressed the view that it was premature.... we thought it was a sensible decision to take it down while the work is done.’

Mr Dawson said the website should never have gone up without the industry having prior notice. ‘This is a process that has been running for the best part of two years, and to launch the website without any notification of industry we thought was very odd,’ he said.

In fact all parties involved were notified at the same time—the day the website went up and came down. Background Briefing has seen the email from the Department of Health announcing that the new site was now live. Among the 81 addresses are Gary Dawson, Geoffrey Annison; the Food and Grocery Council’s deputy CEO, and others in the industry people who had been involved in the planning.

Mr Dawson, in a part of his recorded interview with 7.30 that was not broadcast, said too much fuss was made about Mr Furnival’s role in taking the website down.

‘Well I think that was a bit of confected outrage, to be honest. People move in and out of political jobs from all sorts of backgrounds. It was a political overreaction. It underlined to me how quickly commonsense can be lost in these food fights.’

The Australia Food and Grocery Council declined to speak to Background Briefing, because, a spokesman said, Gary Dawson is a member of the food labelling oversight committee, where there was agreement at a meeting several weeks ago to limit media debate on this issue.

Food labelling 'more important than ever'

Honest, simple healthy food labelling is more important than ever, according to veteran nutritionist, educator and campaigner Rosemary Stanton.

‘Australians are not eating well at the moment,’ she said. ‘And whereas when I started working back in the 1960s we had between 600 and 800 foods available, the average supermarket now stocks something in the order of 30,000 different foods, including almost 2,000 snack foods.

‘So, whereas people used to be able to find out very easily what was in their food, and there wasn’t such a huge array to choose from; these days there are so many foods that nobody is going to be able to go around the supermarket and have the time to read the back of the pack.’

Senior South Australian health bureaucrat Kevin Buckett, the current chair of the labelling oversight committee, gave some examples of how foods would fare under the star rating system at a recent food policy forum organised in Sydney by NSW Health.

‘Amongst yoghurts and other cheeses, you've got low-fat yoghurt at five stars. And 98% fat-free yoghurt gets two stars, which tells you something about the sugar that is being added there.'

‘And one of the reasons that you do need this sort of system is to cut through some of the marketing hype that would indicate a food is healthy when perhaps it might not be as healthy as you think.’

Business, he says, should not feel threatened.

‘Because if your food is healthy you will get a star rating system with a highly credible government sanctioned label on it, which will be accepted and trusted by the consumer to indicate that the product actually is healthy. If it isn't a healthy product, stop telling people it is.’

Related

Transcript

Ann Arnold: It was one of the first parliamentary stoushes of the year.

[Senators shouting]

Penny Wong: Thank you, Mr President. Pursuant to contingent notice I move that so much of the standing orders be suspended as would prevent me from moving a motion to provide for the consideration of a matter…

Ann Arnold: This fight was over food.

Penny Wong: …namely a motion to give precedence to a motion to censure the Assistant Minister for Health, Senator Nash. On this motion, Mr President, there is no more serious…

Chair: Senator Wong, Senator Wong, just resume your seat.

Ann Arnold: Labor Senator Penny Wong led a censure motion against the Assistant Minister for Health, Senator Fiona Nash, claiming she misled the senate about her Chief of Staff, Alastair Furnival, who was a food industry lobbyist.

Alastair Furnival half-owned, with his wife Tracey Cain, a company called Australian Public Affairs, which had previously lobbied on behalf of the food giant, Mondelēz. Mondelēz owns Kraft and Cadbury.

Senator Nash explained how she believed a conflict of interest would be avoided:

Fiona Nash: From the Australian Public Affairs company, they gave a commitment to me, an undertaking—Ms Tracy Cain—that there would be no representations to me, there would be no representations to Minister Dutton, there would be no representations to the department, there would be no representations to any minister relating to the health portfolio, and that has been upheld.

Ann Arnold: The controversy erupted in February when Alastair Furnival phoned the Department of Health and told a senior officer to take down a new website. The website provided health ratings for food products, and some of the big food companies were unhappy with it.

Gary Dawson is CEO of the powerful industry peak body, the Food and Grocery Council.

Gary Dawson: Well, it's a public health experiment that is being funded entirely by food companies.

Ann Arnold: Behind the political scandal of the website intervention lies another battle: the attempt to establish the system of health star ratings for food.

The Public Health Association's Michael Moore says it's a story of cooperation, and betrayal.

Michael Moore: The idea of moving the goal posts when it doesn't quite suit you is something that I just consider appalling and that's why I feel betrayed.

The Nash/Furnival episode was what the public saw. There is a much wider picture of food lobbying and influence.

Alastair Furnival was still a major shareholder and director of the lobbying firm APA while he was the minister's Chief of Staff. The Opposition said it was a clear conflict of interest, especially when Fiona Nash was responsible for preventative health.

Senator Nash put her case in a senate committee hearing.

Fiona Nash: My Chief of Staff gave a series of undertakings ensuring a strict separation between the business of APA and himself. He had resigned as a director from the companies. The business itself, as I have indicated, would no longer lobby in any areas related to my health portfolio, and he advised the federal lobby register to delist a set of clients who had an interest in the health space. Now, they went to every length, Senator, to ensure that that there could be…

Penny Wong: Well, they didn't, Minister.

Fiona Nash: No, let me finish…

Penny Wong: You should stop misleading. You are misleading again.

Chair: Senator Wong! Allow the minister to finish.

Fiona Nash: If you want to ask a question, Senator, you can give me the courtesy…

Penny Wong: She's misleading again. He didn't resign.

Ann Arnold: As a result of the controversy, Alastair Furnival left his position as Senator Nash's Chief of Staff. As well as his lobbying work, he had been previously employed directly by Cadbury as a senior economist.

Mike Daube: To me it's still incomprehensible that somebody with those links could have been appointed, let alone could even have hung on in his role after the initial publicity. We don't know if that's an isolated incident or not, we do know that this is an industry that works pretty well at generating links with both sides of politics.

Ann Arnold: Like many public health advocates, Professor Mike Daube from Curtin University is highly critical of an apparently close relationship between the food industry and politicians.

But Gary Dawson, the CEO of the Food and Grocery Council and himself a former senior advisor to John Howard, doesn't see what the fuss was over Alastair Furnival.

Gary Dawson: Well, I think that was a bit of confected outrage, to be honest. People move in and out of political jobs from all sorts of backgrounds. And, you know, it was a political overreaction. It underlined to me how quickly commonsense can be lost in these food fights.

Ann Arnold: The Food and Grocery Council mainly represents the big food processing companies. It emerged that on the day the health star rating website was ordered down, Gary Dawson had rung Senator Nash's office to complain about it.

While the Food and Grocery Council is the most influential lobbying force in food, there are many others. Mike Daube, from Curtin University:

Mike Daube: If you look at the federal parliament's register of lobbyists, you find there that there are 52 declared clients from the food industry on the lobbyist register. That's also only the tip of the iceberg. That's just lobbying companies, third party lobbying companies, so you add to that all the lobbying that's being done by people working in those companies, the boards, the executives, their PR people and so on. And then you add in 52 clients declared in the register of interests, and you have just a huge, a huge lobbying potential, which health groups just can't match.

Ann Arnold: The intervention of both the Food and Grocery Council, and then the Junior Health Minister's office to remove the health star ratings website was a blow to the public health advocates who'd been involved. They had worked on committees for nearly two years with the Food and Grocery Council, developing the health star ratings system.

It's a simple-looking graphic on the front of food packaging, with a star rating ranging from half a star to five stars, calculated on the amount of salt, sugar and fat. It would be voluntary, at least to begin with, and manufacturers could add some additional information as well. But last year the Food and Grocery Council started publicly criticising the system. Michael Moore from the Public Health Association believed they were backing away from agreements.

Michael Moore: Whilst they were interested in trying to just keep delaying the process and particularly until there was a change of not just federal government but other governments, that would give them time for the whole thing to go away and to die. But health groups and consumer groups are just not going to let it happen.

Ann Arnold: At a recent food policy forum in Sydney, Kevin Buckett, the current chair of the oversight committee charged with implementing the health star ratings system, outlined how it would work.

Kevin Buckett: Just looking at breakfast cereals down at half a star, you've got some puffed rice products, you've got Weet-Bix at four and one half, a bran cereal at five. Amongst the yoghurts and other cheeses, you've got natural low-fat yoghurt at five stars. And a 98% fat-free yoghurt gets two stars, which tells you something about the sugar that's being added there.

Ann Arnold: Kevin Buckett is the director of public health with the South Australian Health Department. The forum, organised by NSW Health, was attended by 300 policy people, nutritionists, public health, consumer and industry reps. The venue had to be changed twice to accommodate the numbers. There's a lot of interest in how food labelling could be improved.

Kevin Buckett: And one of the reasons that you do need this sort of system is to cut through some of the marketing hype that would indicate a food is healthy when perhaps it might not be as healthy as you think. Strawberry low-fat yoghurt gets four, blueberry yoghurts, which is not low-fat, gets three. Greek yoghurt, which tastes the best, gets one and a half.

Fat and sugar and salt are flavours, so there is a natural desire for people to go to those products that have higher fat, higher salt and higher sugar. Having this sort of information available for them we think will give them something else to think about when they are buying their foods.

Ann Arnold: Kevin Buckett says business should see the star rating system as an opportunity.

Kevin Buckett: Marketing. It's a voluntary system, and there are massive opportunities for marketing, because if your food is healthy you will get a star rating system on it, a highly credible government-sanctioned label on it which can demonstrate and will be accepted and trusted by the consumer to indicate that your product actually is healthy. If it isn't a healthy product, stop telling people it is.

Ann Arnold: The Food and Grocery Council did not want to be interviewed for this program because, a spokesman said, there had been agreement by the labelling oversight committee, which the council's CEO Gary Dawson is on, to limit media commentary in the interests of the ongoing negotiations.

But before that committee's first meeting this year, Gary Dawson did speak to ABC1's 7.30 in late February. The excerpts you hear from Gary Dawson in this program are from that interview, some of which was not broadcast at the time. He made it plain that the Food and Grocery Council is not keen on the health star rating system.

Gary Dawson: Let's look at the evidence of whether there'll be benefit and use that to inform how this scheme goes forward, rather than just expecting that it will be funded by food companies and that there won't be any consequence for jobs and investment in what is an important sector of the economy.

Ann Arnold: Processed food is Australia's largest manufacturing industry. And it's growing. A Deloitte report released last week forecasts food processing as one of the future growth waves for Australia. Although hit at the moment by a strong Australian dollar, it's poised to make a big impact on the Asian market. But at the same time, diet-related illness or dietary risk is now the leading cause of death in the world. Not surprisingly, public health advocates and the food industry often clash.

The first labelling proposal was for traffic lights; red for bad food, green for good. This was recommended by Dr Neal Blewett in 2011, following a review of food labelling. But using traffic lights would always be controversial. Veteran nutritionist, educator and campaigner, Rosemary Stanton:

Rosemary Stanton: Certainly in Europe these large companies have put up a lot of money to try and shout down any approach that uses traffic light labels on foods. And I think that's quite simple, because there was some research done in the UK that showed that when foods carried red symbols, sales of those particular products went down. So there's no great mystery as to why they don't like traffic lights, but it seems to be the parent companies and their offspring in different parts of the world are all universally opposing any idea of traffic lights, or any idea of trying to distinguish between different foods. So they all have this line: there are no junk foods, there is only junk diets. To which I would say, well, what are the junk diets made up of if they're not made up of junk foods?

Ann Arnold: A mandatory traffic light system was deemed by the health ministers to be too hard; expensive for industry with the colour-coding, and difficult to regulate across states and territories. Instead, steps were taken towards what could become a world first; the star rating system. Even the process was revolutionary, because it brought food enemies to the same table.

Catherine King, now the Shadow Health Minister, was then the Parliamentary Secretary for Health, with responsibility for preventative health.

Catherine King: We took the decision that we would start to see if we could get industry and public health professionals together, led by the Secretary of the Department of Health, and I quite deliberately asked her to do that, because it needed that level of senior management within the Health Department to bring those players together. At that time both were saying…public health people were saying, you know, 'There's no way that we can do anything with the industry, it won't work.' Industry were saying, 'Well, we're not changing.' So it was a pretty complex process to bring those two players together.

Ann Arnold: Involved from the beginning was Michael Moore from the Public Health Association.

Michael Moore: The meeting was convened by the Secretary of the Department of Health Jane Halton. And in fact actually it was the first of a series of a dozen or so meetings, and it involved the Food and Grocery Council, the beverages industry, the Australian Industry Group representing confectionery, a series of representatives from states and territories, the consumer group Choice, and health groups such as the Heart Foundation, Obesity Coalition and the Public Health Association. So these sorts of groups sat down around the table to try and find a way, and we agreed in principle that what we were trying to do was find a simple front-of-pack labelling system that was easy to read, easy to interpret, and helped people to make healthy choices.

Ann Arnold: And did you feel optimistic at the start of that process that everybody that was there wanted that to happen?

Michael Moore: Actually at the start of the process I think there was quite a lot of trepidation. As the process went on through the first year, I think we all grew in confidence, a great deal of confidence, because we really were working hard to try and find a compromise that would work. And when we came up with the star labelling system, because it works on white goods, because it works on movies, because it works on hotels, it would be easy to understand, it would give an overview of the healthiness of the food, I think our optimism grew.

Catherine King: I mean, there would have been hours and hours of work gone in, you know, it's not just the meetings of the main group, there are a lot of technical smaller groups that were formed to look at doing evaluations, doing consumer testing, actually looking at the technical bits as to how do you make a decision about what nutrients get what score in that process.

Ann Arnold: Catherine King.

Michael Moore became co-chair of a key committee, so his involvement deepened.

Michael Moore: When we set up the technical design working group where I co-chaired that with the deputy chair of the Food and Grocery Council, and we worked on it very, very carefully together, in a very respectful way…

Ann Arnold: This is to actually design the rating system?

Michael Moore: To design the rating system and to develop the style guide. I asked that Rosemary Stanton be appointed to that because of her knowledge of nutrition, and her understanding of these issues. At the very start of the process she said to me, 'Michael, yes, I'll do it, but I am concerned because of the number of times that I have been through this sort of process and it looks good and then the Food and Grocery Council reneges.'

I had that in the back of my mind, and I thought this was not going to be one of those times because of the good faith in which we had all gone into the negotiating. And I think that also includes the deputy CEO of the Food and Grocery Council, and I think he negotiated in good faith.

Ann Arnold: At one stage you were so optimistic about getting a really good negotiated solution here that you were going to write something about that.

Michael Moore: There was a very interesting article appeared in the Lancet. It was written by Bruce Neal at the George Institute in Sydney and Rob Moodie from Melbourne University, and others, saying that whatever you do, you simply can't negotiate with the tobacco, alcohol and the junk food industry. Now, I agree with them wholeheartedly about the tobacco industry and the alcohol industry. But here we were with the food industry, working very closely, finding a solution. And I actually went to Geoffrey Annison from the Food and Grocery Council and said look, I reckon we could write a response to this when we get this system up and running. Well, that article has certainly gone down the gurgler.

Ann Arnold: Michael Moore spoke to Background Briefing in February, and he was still reeling from the website saga and the Food and Grocery Council's involvement in it. In government circles last year there was word of the Food and Grocery Council changing tack. Catherine King, then Parliamentary Secretary for Health:

Catherine King: Well, look, as we got closer and closer to the federal election, certainly the reports that I was getting in, both from the Department and public health professionals, was that the food industry was starting to slow things down a bit. I was certainly of the impression that certainly the food industry was waiting to see what the outcome of the election might be before it geared up and made any stronger commitments to the amount of work that had already been done.

Ann Arnold: The front-of-pack labelling committee met for the last time before an all-important meeting of health ministers in June last year, three months before the federal election. The June ministerial forum would either approve or reject the committee's recommendations. Michael Moore said the labelling committee had definitely agreed on the star rating system, and had been working successfully on some anomalies within it.

Michael Moore: Just to emphasise that there was agreement, we agreed to the system and we had sorted out the anomalies, and we went to the ministers in June 2013. The ministers accepted that but in the interim between when we agreed to the statement and when the ministers accepted it, the Food and Grocery Council came out talking about some anomalies they had found and weaknesses in it, and came out publicly, and wrote to all the ministers asking them to delay the process.

Ann Arnold: And they had not raised this in your meetings?

Michael Moore: They had raised questions in the meetings but we had resolved them.

Ann Arnold: Among the apparent problems that the Food and Grocery Council raised in public was the Chiko Roll. Gary Dawson:

Gary Dawson: Well, there are still anomalies in there. I mean, we've pointed for example to the Chiko Roll rates as a health food, it rates as three stars. Now, most people would go, 'Really?' I've got nothing against the Chiko Roll, it's a great old Australian brand, and all power to them, but if you're looking at consumer credibility, these are things have to be taken seriously.

Ann Arnold: But Michael Moore from the Public Health Association says the Chiko Roll example was a furphy.

Michael Moore: Of course the particular Chiko Roll they had chosen was one that was deliberately developed to be healthy, not the standard Chiko Roll that we would expect to have a poor star rating because of the amount of saturated fat. There were those sorts of examples.

Probably the most interesting was water because of course the dietary guidelines encourage drinking water, but water carries no nutrients, and what we were doing was having a system based on nutrients. So we had to have an overriding decision to say that actually water should receive five stars.

Ann Arnold: It was always anticipated that some foods wouldn't fit neatly into the calculator.

Michael Moore: That's why an oversight committee was set up to watch it, and to deal with any such anomalies. And the Food and Grocery Council absolutely knew that.

Ann Arnold: There was a particular problem with dairy goods. Michael Moore says all parties had agreed they were rated too low.

Michael Moore: The way dairy worked within the system, it tended to push dairy to the bottom of the star system. And yet the dietary guidelines were saying actually you should be eating dairy. And it's the embedded fats and sugars in the milk products that were really causing the issue more than anything. So what we did was instead of…like other foods getting a half star, everything gets a half star because you can eat it. Instead of starting at a half star for dairy we just took the healthiest dairy products such as light milk and we gave it five stars and then worked down. So some of the dairy products…there's very few that get below two and a half stars.

Ann Arnold: Another issue introduced by the Food and Grocery Council was the dietary intake guide, the information that currently appears on packaging in a thumbnail or tombstone format. It was an industry initiative and, according to the council, by mid-last year had cost the industry $72 million.

Gary Dawson:

Gary Dawson: We need to preserve the investment that the industry has made in the daily intake guide, which is a world-leading system, now being adopted as virtually the global standard, in North America and in Asia.

Ann Arnold: Public health and consumer experts say the dietary intake guide is not well understood by the average shopper. The industry's insistence on keeping it surprised other negotiators.

Nutritionist Rosemary Stanton:

Rosemary Stanton: Suddenly we did seem to get the Food and Grocery Council saying, 'Well, this of course has to be in conjunction with the Daily Intake Guide', so suddenly it seemed like that hadn't gone off the table. And we had all thought that that went off the table along with the traffic lights right from the word go. And frankly, if it had been on the table and had to stay on the table right from the word go, I and I think some of the other public health people would not have become involved in the whole system.

Ann Arnold: So they wanted to keep that there as well as the star rating system.

Rosemary Stanton: Yes, which would be very confusing.

Ann Arnold: But by this stage the major issues, Michael Moore believed, had been sorted. The apparent dispute confused the health ministers.

Michael Moore: I spoke to a number of ministers prior to that meeting, and they were perplexed as to why we would suddenly see a turnaround when they knew we had agreement because the papers that went up to them showed we had agreement. In fact the ministers said we will now adopt this, we accept it, there's a little bit more work to be done to make sure the calculator has finally been checked more widely by industry.

Ann Arnold: The health ministers actually took a further step of their own volition. They set an end date to what had always been conceived as a voluntary scheme.

Michael Moore: The other thing that took us by surprise is that ministers then decided that they would add another factor to it, and they said that if this wasn't getting widespread adoption within two years, they would consider making it mandatory.

Rosemary Stanton: It was quite thrilling to us to think, well, if the food industry doesn't get behind this, after a couple of years it will become mandatory. And that certainly didn't come from our group, it didn't come from the front-of-pack labelling people, it came from the ministers. And when those ministers include Coalition ministers, then I think that it shows that people can see the value in this new system.

Ann Arnold: Nutritionist Rosemary Stanton.

Although Catherine King had by now moved on from Health, and Shayne Neumann was the new Parliamentary Secretary, she kept in touch with the food labelling progress.

Catherine King: I've always had a particular interest in this one. You know, you like to pay attention to your policy areas that you've had some carriage over. And certainly Shayne Neumann was having a chat to me about the lead-up to the June meeting and how things were going, and was very happy about…you know, he spoke to me afterwards to say, you know, I did manage to get it through, and it was a difficult meeting, but we did manage to get it through, and it's all done and it's fine.

Ann Arnold: The Food and Grocery Council didn't think it was fine. The ministerial decision to make the system mandatory if there wasn't enough take-up by industry did not go down well.

Gary Dawson:

Gary Dawson: It's a voluntary start up, but there's a clear threat to force this on food companies from June next year. That's written up in the decision, and so the cost impact is real.

Ann Arnold: The Food and Grocery Council issued media releases later in June saying that the announcement of the new front-of-pack labelling system had been 'rushed out', that serious flaws remained, and that there had been no cost benefit analysis.

CEO Gary Dawson:

Gary Dawson: We know it will cost individual companies millions of dollars and of course the industry we'd estimate around $200 million industry wide. So it's a significant cost, particularly on an industry that's in a financial squeeze at the moment. Profits are declining. Companies like SPC or Simplot can hardly afford spending millions of dollars on a scheme where the benefits are far from well understood or proven.

Ann Arnold: The managing director of Simplot Australia is Terry O'Brien. He's the chair of the Food and Grocery Council. He took up the role in February last year. Simplot is an American-owned private company whose Australian brands include Edgell, and Chiko.

Background Briefing sought an interview with Terry O'Brien, but he declined.

He was quoted in The Australian in December citing the cost to his company that the new labelling would bring, an estimated $2.5 million. Simplot was at that stage faced with closing its factory at Bathurst in New South Wales. The company has since announced nearly 300 jobs will be cut from Bathurst, and another base at Devonport, Tasmania, over the next few years.

The Australian reported that the Food and Grocery Council was actively lobbying National Party MPs about the star ratings system.

When CEO Gary Dawson talked to 7.30 last month, he downplayed the role he and the new chairman had in changing the council's position.

Gary Dawson: Look, I think that's concocting a bit of a conspiracy, but we certainly have discussed this at board level, pretty much at every board meeting over the last 18 months. And the view has always been that we need to see a cost benefit analysis.

Ann Arnold: But according to Michael Moore from the Public Health Association, the call for a cost benefit analysis is a delaying tactic.

Michael Moore: We put in a huge amount of time and effort, and dealt with this particular section of industry in good faith. And now we see a turning away from that and use of standard political tactics when you don't want something to happen, of delay.

Ann Arnold: How do you feel about that whole process at the end of it now?

Michael Moore: Oh well, shafted of course!

Ann Arnold: At the most recent health ministers' forum in December, the chair—the junior health minister, Nationals Senator Fiona Nash—announced that a cost benefit analysis would be undertaken, although there were was no vote. That process is now underway, with PricewaterhouseCoopers holding a series of forums this week to discuss the likely impact of the star-rating system on both business and consumers.

Public health specialist Professor Mike Daube was invited to one of these sessions. He says the Food and Grocery Council's influence is aligned with the interests of the big multinational companies.

Mike Daube: I think one of the things that we need to take into account is that as we saw with tobacco plain packaging, these global companies are concerned about any possible restrictions on their activities in Australia. Once it has been done in one country, other countries are likely to follow, so it's important for them not just to maintain as much freedom as possible here because of what happens in Australia, but because of what the implications could be overseas.

Ann Arnold: The major companies represented on the board of the Australian Food and Grocery Council—such as Kelloggs, Mondelēz, and Mars, and of course Simplot—are American-based. In the US, similar battles over labelling are being played out right now. It was announced last month that the Food and Drug Administration is planning changes to nutrition labelling.

Marion Nestle: Mrs Obama, the President's wife, the First Lady, announced that at long last the FDA's long-awaited revision to the 1993 food label has been proposed and is now in comment phase. And that's one of the things that she had hoped to do as part of her Let's Move campaign.

Ann Arnold: Professor Marion Nestle from New York University is the author of several books, including Food Politics. The changes to the existing nutrition facts panel being spearheaded by Mrs Obama include showing added sugar, and smaller portion sizes.

Marion Nestle: While the grocery manufacturers, widely understood to be absolutely furious about the new nutrition facts panel, issued a very calm, rational, temperate statement that they were eager to work with the FDA to help educate the public about nutrition. That was their public statement, which I thought was just brilliant. But behind the scenes they are very busy lobbying.

I think food companies don't want to be a position where they are attacking the First Lady, who is extremely popular with large segments of the American population and is clearly trying to do good for America's children. It's pretty hard to attack that.

Ann Arnold: Marion Nestle says the Grocery Manufacturers Association, the equivalent of our Food and Grocery Council, also made a pre-emptive strike, announcing a bolstering of its own labelling system, before Mrs Obama's announcement.

Marion Nestle: It was very clear in the press, there were many, many announcements in the political press that the Food and Drug Administration, the FDA, was going to come out with proposals for a new nutrition facts label. That's been in the air for several weeks. Soon after these rumours came out, the Grocery Manufacturers announced that they were going to be spending $50 million to promote their Facts Up Front labels on the front of packages. These are little markers of nutrition information, well known to be completely uninterpretable by the public, that the grocery manufacturers introduced several years ago. But they waited until now to announce this big advertising campaign. And they are doing that I think for two reasons. One is to argue that the changes in the nutrition facts panel are unnecessary. And the other is to pre-empt any possibility that the FDA will take up its front-of-package initiatives.

Ann Arnold: In Australia, the food industry is talking up its own labelling system, the dietary intake guide. Michael Moore from the Public Health Association believes they'll be well heard by the current government.

Michael Moore: It's not surprising they would have more of the ear of conservatives who have come in saying we are open for business, we are open for industry. And they would be arguing that this will be more jobs, they always argue more jobs. They also have the wherewithal to make political donations, we don't, and that's all health groups really.

Ann Arnold: The former Chief of Staff to Senator Fiona Nash, Alastair Furnival, was well connected to the Food and Grocery Council. One of the board members is the managing director of Mondelēz who Furnival had previously worked with. Michael Moore says that set up an easy relationship between the council and Furnival.

Michael Moore: Look, he was the Chief of Staff of the Assistant Health Minister responsible for food, so of course they would be talking to him. They would see that they were on the same wavelength. So I think that they could not so much bring pressure to bear but bring the ideas to bear to get his support.

Ann Arnold: And are there any other relationships that you think are possibly quite instrumental in this whole process?

Michael Moore: Oh look, the appointment of Gary Dawson, CEO of the Food and Grocery Council, was a very sensible appointment by the board. He had been very close to John Howard, he had been a senior member of staff within John Howard's staff, and media adviser. And so he would have dealt very regularly with many, many of the members of parliament who are likely to be ministers, and who have become ministers.

Ann Arnold: Gary Dawson told the 7.30 program that he did phone Senator Nash's office on the day the healthy star ratings website came down.

Gary Dawson: We think it was a sensible decision to take it down while the work is done. And so on the day, yes, we expressed a view that we felt it was premature.

Ann Arnold: Gary Dawson put to the Minister's office that the health star ratings system was not yet fully worked out, and the website wasn't ready. Others say that although there were teething problems with the website, they could have been fixed, and that a website approved by a joint ministerial forum should never have been removed by one entity, a Commonwealth department.

Senate Estimates heard there were several calls made that day from the Minister's office to different senior officers in the Health Department about removing the website. Gary Dawson says it should never have gone up without prior notice to the industry.

Gary Dawson: This is a process that has been running for the best part of two years, involving a wide range of groups, and to launch the website without any notification of industry we thought was very odd.

Ann Arnold: In fact all parties involved were notified at the same time; on the day the website went up, and came down. Background Briefing has seen the email from the Department of Health announcing that the new site was now live. Among the 81 addressees are Gary Dawson, and the Food and Grocery Council's deputy CEO Geoffrey Annison, as well as other industry people who've been involved in the planning.

Catherine King, the Shadow Health Minister, says the website drama of that day has still not fully been explained.

Catherine King: Well, it seems to me that an email went out from the Department of Health from the worker responsible for the front-of-pack labelling development that said, 'The website's ready, it's up, go and have a look at it.' That email went to a large range of people, all of those people involved in the development of the front-of-pack labelling system.

It then appears, from what I can understand, there were a flurry of phone calls from the Minister's office, both from the Chief of Staff, from an assistant adviser and from the Minister herself, demanding that the website be taken down. There's never been any good explanation given as to why that was the case. There's been several different explanations given, none of which, frankly, are true.

Ann Arnold: How do you know that they're not true?

Catherine King: The first explanation that was given, which was given by a media communications person from the Department of Health, was that the website had been put up inadvertently. That claim has never been repeated. The second two explanations have come from the Assistant Health Minister herself, both of which have been subject to substantive debate within the Senate. The first was that it wasn't ready, and the second was that it was subject to a unanimous decision of the food regulatory ministers to undertake a cost-benefit analysis, something which has been disputed both by the Tasmanian and the South Australian Health Ministers, and who have written to the Assistant Minister about that as well.

Ann Arnold: And said, 'Look, we never agreed that that was needed'?

Catherine King: I think what they said is that there was never any vote taken on it because it was seen as just a side issue basically, that, you know, well, the Commonwealth wants to do that, fine, it can do it, but it's got nothing to do with the substantive agreement in terms of the system being established. And the communiqué basically reflects that.

Ann Arnold: When she was Parliamentary Secretary for Health, Catherine King says she kept an open door to lobbyists for both public health and industry. But she says there is an inherent problem when industry is talking to a Health Minister.

Catherine King: I used to say this frequently to the industry players who came to see me, is that I am obviously going to bring a health perspective to these issues. If you want to lobby about an industry issue, then you need to go and see the Industry Minister.

Now, that meant I did butt heads with the Industry Minister on occasion over particular issues. It meant I butted heads with the Agriculture Minister on occasions as well. But that is part of the policy development process, is that you have to argue your case, debate your points and fight your corner. And my corner was to try and improve the health of Australian consumers.

Ann Arnold: Catherine King.

As for the future of the health star ratings system? Senator Fiona Nash declined to be interviewed for this program. But a spokeswoman provided a statement saying: 'The Australian government does not oppose a voluntary front-of-pack health star rating system. The process to develop it is continuing and has not been delayed by the taking down of the website.'

The most recent meeting of the oversight committee was in Sydney on 3 March. Gary Dawson was there for the Food and Grocery Council. The meeting resolved to continue work on the star ratings system.

Mike Daube has not been directly involved, but, after a lifetime working in public health, he remains pessimistic about the Food and Grocery Council's apparent co-operation.

Mike Daube: Of course they're wide open to discussion, they want to be at all the discussion tables, they want to be discussing til kingdom come, they'll discuss, they'll negotiate, they'll come out with more and more work that needs to be done. It can be cost benefit analysis today, it can be more testing tomorrow. The bottom line is that they will keep discussing until 2064 if it stops anything from happening.

Ann Arnold: When the Food and Grocery Council declined our requests for an interview, Background Briefing sent a series of written questions to the council. Those questions, and the council's responses, can be seen on our website.

Thanks to the 7.30 program for the audio of their earlier interview with Gary Dawson.

Background Briefing's co-ordinating producer is Linda McGinness, research by Anna Whitfeld, technical production by Leila Shunnar, the executive producer is Chris Bullock, and I'm Ann Arnold.

Credits

Comments (18)

smudge08 ®:

28 Mar 2014 2:54:57pm

The whole star rating system does assume that there is one commonly accepted standard of rating something. The energy efficient star rating for example - we have a twin tub washing machine that is low on the star rating (3 out of 6) since it uses a hot water setting and this rating makes the assumption you are using an electric hot water system. We have solar hot water so using hot water is no problem. In actual electrical usage it draws less of a load than automatic washing machines. Ditto for water star rating which assumes you are using fresh water each time. When you do 5 loads with the one tub of water it's incredibly water efficient.

Long story short, I believe the same is for the food rating system. If we rate something high because it is low in sugar but contains chemical sweeteners, is that a good thing? Studies show that these artificial sweeteners are dangerous for our health. More studies are coming out to show that full (unadulterated) fat in moderate doses is better than some of the low-fat alternatives the market is 'saturated' with. (pardon the pun)

Dave :

28 Mar 2014 5:14:56pm

Good comment. On the last point, you are correct that scientists/nutritionists are still in the pretty early phases of understanding what is healthiest (or least unhealthy) when it comes to different types of sugar/carb, fat and protein ratios. It's surprising how poorly we understand this when you consider how long we've been eating food and how much data we have available, but there you go. Artificial sweetners and other additives undoubedtly complicate the picture.

Base the star system on our best science, and review and modify it as appropriate as new research comes in. It is possible that a 'good' food will be found to be bad and vice versa, but much better than nothing.

Brian F ®:

28 Mar 2014 4:43:53pm

Star ratings are a good idea but I agree with smudge08 that it will always be controversial. Low-fat yoghurt is a good example - you can get cow's milk and make plain <4% fat yoghurt, but low-fat yoghurt is a manufactured product with synthetic sweeteners. Still, if you picked up your soft drink, chips or microwave dinner and saw it got zero stars, maybe you'd think twice. Maybe!

Max_Gross ®:

wigles ®:

28 Mar 2014 5:03:40pm

smudge08: you seem like a pretty intelligent and informed sort of person, you clearly had the time and expertise to work out what was the best solution for your own circumstances and for that you should be very grateful, rather than being a smug so-and-so. Most people in this world are not so fortunate, they either lack the time, the knowledge, the experience, the ability or just plain couldn't be bothered to work these things out. The upshot is that we are facing a massive public health problem that will adversely affect ALL of us in some way or other, whether it be directly from a bad health outcome for us or someone close, or by being unable to get medical attention because others are clogging the health system, or just that so much of our taxes will have to be diverted to looking after people who make poor choices. Lets make it easy for everyone to make better choices. It might even encourage Mondolez, Cadbury, Simplot and their competitors to make better choices for those consumers who for whatever reason seem to make all the wrong choices if given half a chance!

Jets 80 ®:

Speedgal58 :

28 Mar 2014 6:25:42pm

I think consumers have to take some responsibility for what they eat, themselves. If you have a basic knowledge of nutrition you know what's healthy and what's not - that that varies enormously from person to person depending on sex, age, activity level, individual genetics and so on. If people were to take the same position as I do which is don't eat processed food - or keep it to an absolute minimum then the power of the food and grocery council would soon diminish. Why does it always have to be up to government?

tropix ®:

I think you would be very, very suprised with how much many people DON'T know. Especially out of the cities.

We need something. When I arrived here in 2004, I could not believe the amount of sugar/sweeteners/corn syrup and salt added to Australian consumed food. I literally couldn't eat some of the same stuff I ate in Europe. How did that happen? The only reason it is there is to get people to buy more. The state of food here is pretty shocking. Then you get to the N.T where I live and it's near impossible to eat a balanced diet on a middle income, and completely impossible on a low income. I really mean impossible.

Of course the biggest shock was that there are just 2 supermarkets for the masses. I mean, 2? Australians let all this happen, so what bit of responsibility do Australians take?

AnnieRA ®:

29 Mar 2014 11:35:30am

It is theoretically a good idea to have a rating system for food. Unfortunately, such a rating system presumes that there is agreement on what constitutes "good" or "bad" when it comes to the foods we eat. Fats are a case in point. The low fat fad is one of the key drivers of the obesity epidemic, yet I feel quite certain, that like the vast scam represented by the "healthy heart tick", all the wrong foods would be recommended. Even though the food industry is protecting their own antisocial needs, they are accidentally on the right side on this issue.

HB365 ®:

Generality ®:

Exactly how would it cost the food industry one red cent, if the star ratings were put on a website that people could access. instead of on the labels?

Therefore any objections by the food companies themselves, or by those inside govt which lobby for them, are moot.

People would be able to search for products that fit their particular needs. For example gluten free, or all australian ingredients, or EXCLUDE something they are allergic to in the ingredients. It would make life so much easier and the results (just like a google search) would produce all products (by all companies) that fitted that search. Thereby not being involved in inductry or marketing in any way. Its pure information and consumer choice.

I would not support a system that would give "stars" possibly based on "influence". And the notion of "healthy" has previously been applied to products we now know are deadly or cause brain damage etc. Science being paid by someone who wants to push a product cannot be relied on.

Give us the information, and the ability to do a search from a well built database, and leave the rest with us.

EM Laidly ®:

More Australians will die younger as a result of bad dietary choices than will die from installing insulation or from terrorism.

The pressure from the AFGC is about protecting the corporate food industry who's products, it has been amply demonstrated, have, and continue to have a negative impact on the health on Australians.

All protected by a government who claims they are committed to reducing the cost of healthcare.

The AFGC, Fiona Nash, Alistair Furnival should be independently investigated in conspiring to undermine the efficacy of the Health Star Rating scheme. If there is a case, they should then be prosecuted under criminal law.

Another odious comparison:This is ten times more serious than a union official spending union funds on booze, hotels and prostitutes. But conservatives have NEVER rated public health as important.

Generality ®:

29 Mar 2014 7:13:25pm

Doesnt it come down to you can lead a horse to water? You quoted statistics on ill health from food, but in my experience most people really dont care what's in there as long as they like it, or it tastes good, or its quick and easy. So even with the star rating, will that change those statistics? Unlikely. So I'm not sure it could be used as justification for this system. Add stars and people will still buy for other reasons. And forgive me if I am wrong, but arent those the very people in the bad health statistics? Its about choice, and they choose food for "other" reasons. Not health,

Shaime ®:

29 Mar 2014 3:37:35pm

The AGFC and its members are the 21st century version of the tobacco lobby. They are - knowingly - destroying our public health system and killing people. A lot of people.

Just as Howard's COALition government took dirty money and turned a blind eye to mass killings by big tobacco (and some, such as Minchin, even denied the addition/harmfulness of cigarettes), so too is Lord Abbott's team supporting the accelerated demise of millions of Australians at the hands of sanctioned food poisoners.

Towittowoo ®:

30 Mar 2014 3:36:20pm

Actually, the delay in coming to any firm agreements is probably motivated by global companies waiting to see if Australia signs up to the Trans Pacific Partnership (TPP) with the investor-state dispute settlement (ISDS) clause in tact. This will enable them to sue the Australian Government for loss of income resulting from having to adopt a star rating system (or similar). Philip Morris Asia is now challenging our tobacco plain-packaging rules under this clause in a free trade agreement signed in 1993 by Australia and Hong Kong.

wildfood ®:

30 Mar 2014 4:18:52pm

The health advise is to eat fresh foods and limit packaged foods, however the modern era is time pressured. Regardless the most important issue people are concerned about is if the foods are genetically engineered which is currently impacting on animal and human health more than a bit of fat. We have been calling for this disclosure for years and this is what we wanted when suggesting traffic light systems. As stated in the show when changes occur in one country they flow to others- then why is it that in some countries companies have implemented labelling of GM ingredients and yet we are unable to get the same in Oz? Stop fighting about nutrient priorities and label the crops which have NO HUMAN TESTING with tampering in the genes to allow plant killers to be consumed for the first time! LABEL GMO'S THANKYOU (and not just FSANZ's limited standards but all ingredients including animal fed). It shouldn't be hard and is needed for traceability for allergies, and GM crop problems and recalls.

alcophyle ®:

01 Apr 2014 6:20:45pm

Half the isles in supermarkets contain manufactured products that probably shouldn't be classified as food. I think that the rating system could start by separating these products as food and non food first and then display the nutritional credits in a clear unambiguous way. Clearly salt and sugar content are key elements here. Fat appears to be another issue. Saturated fat has never been clinically associated with heart disease; big pharma have used this mythology to make billions out of the sale of Statin drugs. The seed oils appear to be the real fat bad guys. This would appear to add some complexity to the rating system but would be of great community health value.

Jets 80 ®:

08 Jul 2014 11:30:28pm

It amazes me sometimes that we have this ongoing discussion around the question, 'Why are people bulging at the waist?' Look at what you eat!

I can venture some suggestions. The fact that there are soft drinks, potato crisps, microwave dinners, and other highly processed 'snacks' on our supermarket shelves, along with the fact that fast food outlets are packed around the country most weekends and many weeknights, leads to a very obvious conclusion - people are consuming this RUBBISH in sufficient quantities for the manufacturers to keep producing it.

I can't mention any specific brands, but some of the products on supermarket shelves are so full of artificial junk it's not funny. I wouldn't touch the stuff. Yet the fact it's there means plenty of people are doing just that!

Stop eating rubbish and start buying healthy, wholesome food. Most of what you buy should consist of fresh produce, fresh meat or fish, bread (the real stuff, not that highly refined white 'bread') and healthy snacks - the best way to ensure they are healthy is to make them yourself. If you don't have time, be choosy and read the labels because most of the snacks on supermarket shelves are rubbish.

I am a busy person like most of you but your health is your health! I put in the effort to eat well. It doesn't need to cost a whole lot more either. If you buy in bulk, and make most meals at home, it's easy.